DOJ sets stage for possible Google challenge

The U.S. Justice Department has hired a well-known lawyer, former Walt Disney vice chairman Sanford Litvack, to weigh and possibly lead an antitrust challenge against Google, the Wall Street Journal reports today. Google’s advertising pact with Yahoo would be the most likely target of a case, but it’s not clear if the DOJ will proceed. From the story:

For weeks, U.S. lawyers have been deposing witnesses and issuing subpoenas for documents to support a challenge to the deal, lawyers close to the review said. Such efforts don’t always mean a case will be brought, however.

Mr. Litvack, who was the Justice Department antitrust chief under President Jimmy Carter, has been asked to examine the evidence gathered so far and to build a case if the decision is made to proceed, the lawyers close to the review said.

Of course, Microsoft has traditionally been a big focus of antitrust scrutiny, but this situation has put the company on the other side of the fence. Brad Smith, Microsoft’s general counsel, has spoken out repeatedly against the Google-Yahoo advertising partnership, saying it would put too much of the market in the search giant’s hands.

Under the Google-Yahoo partnership, ads from Google’s lucrative system would appear next to selected results on the Yahoo search site. The idea is to give Yahoo a financial boost. The plan was conceived when Microsoft made its big (and ultimately unsuccessful) offer to buy Yahoo earlier this year.

Google and Yahoo say the non-exclusive arrangement is legal and doesn’t require regulatory approval. However, it’s being delayed while the Justice Department investigates.